Eliminating poverty; an unsophisticated proof

[afterzir]

I came up with a very 'loose' proof for the elimination of poverty and I want to throw it out there.

 

The idea:

      Exponential growth is where you start off by rising very slowly but then at some point you start to skyrocket.

      Interest (compounded) is exponential and its formula is $ = pe^rt.  If the variables p, r, and t can be

      maximized, then a person can reach or come close to the skyrocket part of the exponential curve.  P, r,

      and t can be maximized with certain assumptions.

 

Maximizing t (time):

       Assumption: deflationary economy

             Deflation favors lenders over borrowers and so lenders will want money as soon as possible to invest with (I don't know much about finance, but from watching venture capital firms in silicon valley where there is a kind of deflationary environment, it seems as though they would like to raise funds quicker and at a larger size if they could [this observation comes from me watching many techcrunch videos]).  (I picture banks and other financial institutions offering companies some kind of incentive to have their employees start depositing with them as soon as they begin working) (I'm guessing that the average age people start saving for retirement is in their 30's, but with deflation it will be in their teens/20's)

 

Maximizing p (principal):

       Assumptions: deflationary economy & no taxation

              With deflation, lenders will not only want money soon but also as much of it as possible since they are favored.  Without corporate taxes the companies can pay higher salaries / Without income taxes the workers can keep more money / Without sales taxes the price of goods will drop.  All this means the worker will have much more money.  Plus, with deflation prices tend to fall so there is no rush to buy things so you might as well park that money with some financial institution in the meantime.  The low time preference plus fat pockets plus favorability of lenders leads to maximizing p.

 

Maximizing r (interest rate):

        Assumptions: (laizze faire) capitalism & no copyrights

               In capitalism, you try to maximize profit which will lead to high returns for the lenders/stock holders.  Also, capitalism applied to education will produce people who are much smarter and more entrepreneurial.  Companies create new stuff or improve upon existing stuff in order to make money and copyright interferes with the latter and sometimes the former too so it needs to go. This probably sounds kind of loose/weak but I won't elaborate further. 

 

Is this good/bad/mediocre?  

[Bortasz]

I have problem's to understand what you are writing. So maybe some definition: 

 

Exponential growth in numbers.

1, 2, 4, 8, 16, 32, 64, 128, 256, 512, 1024, 2048, 4096, 8192, 16384

Deflation is when: 
In year 2000 you was able to buy 100 donuts for 100 dollars 
Than 10% deflation happen. 
In Year 2001 you are able to buy 110 donuts for 100 dollars. The value of dollar went up so the cost of donuts when down.

Inflation is when:

In year 2000 you was able to buy 100 donuts for 100 dollars. 
Than 10% inflation happen. 

In year 2001 you are able to buy 91 donuts for 100 dollars. The value of dollar went down so the costs of donuts go up. 

 

Inflation is bad for people who save money since each year they are able to buy less stuff. With means inflation is bad for people who want safe money for there retirement. 
Inflation is bad for Investors since they must earn the amount of Inflation to go even. Minus sum game. 

Inflation encourage spending money as quickly as possible. = encourage buying useless shit. 
Deflation encourage savings, since you must just wait to be able to buy more stuff for the same amount of money.
Deflation encourage investors/lenders since even if they earn 1% they will earn value of deflation as a extra. 
If I lend you 1000 bucks, and you give me back 1100 after year, and it was deflation 10% in that year I have money that are worth as much as a 1210 from a year when I lend you money. So I earn 21% total of my investment instead of just 10% that we agree when I lend you money. 
If it will be the same sytuation. I lend you 1000 dollars for a year for 10%, but Inflation 10% happen. After a year when you give me 1100 I have the same value as a year before. I'm em in the same place. If Inflation will be higher (For example 11%) I will lost money in this situation. 
 

The fun factor. Deflation is impossible as long as banks are able to create money. Since banks are capable of creating money there always be a inflation. 

 

The simplest answer to poverty is: 
- Stopping banks from creating money. 
- Stopping creating small cents 1 and 2. 

- Reducing paper work, and government control over the economy. = Allowing people to try increase there life standards. 
- Exterminating the socialistic=Government safety net.

People should be able to fail. Because failing is lesson: "Don't do that." or "Try harder." 
 

Second fun fact: The economical crisis is natural and unavoidable. If we think about economy of country as a body, the economical crisis is cutting of cancer(unprofitable business) 
The only variable that people control is how fast it will end, how long the operation last. If they will feed cancer=bad business via the government subsidiaries the crisis will last longer and many healthy cells (Good business) will die in the process. The crisis that last long enough will kill the patient. 
I have hope that I help.